Why We Are Afraid to Talk Pricing

When I heard Marcus Sheridan speak at BlogWorld, one thing that stood out was his statement, “Businesses are afraid to talk about pricing.” I realized he was completely right.

Think about the last time you went to a website for a product or service that you couldn’t buy outright online. Did it list prices? Or did the site encourage you to call for more information? How many times do you walk away from a purchase simply because you couldn’t get enough information on pricing to make an informed decision? I know that’s been the case for me in many instances.

Why We Don’t List Prices

I think we’re afraid to talk about pricing on our websites because we want to convince potential customers of the value our products provide. Simply giving a number doesn’t express how awesome our widgets and doohickeys are. But we, our companies’ salespeople, can expound upon the benefits our products provide! They’re magical and worth every penny!

But the truth is: Price does matter. No matter how magical your unicorn clone machine is, if it’s out of my budget, there’s nothing you can do about that.

Writing From Inspiration

I decided to write this post after I had an experience that hit home on this topic. I was looking into gyms in my area. I found one website, but it didn’t list prices, so I called. My husband groaned in the background:

“Don’t call!”

I found out why. I was put through to the sales guy. I asked how much a family membership was. His response?

“Let me get your name!”

Instantly, I was put off. I explained I simply wanted to get pricing, not sign up for anything. We proceeded to get into an argument; he said I was reducing his product to a price. He wanted to talk about value. I told him I was familiar with his brand, and I just wanted information on pricing to help me make a decision. I got frustrated and got off the phone.

Guess what gym I didn‘t sign up with?

Bingo. There it is. As business owners, we hate the idea of customers reducing our product to a price. But they do. If I hadn’t considered that gym of the quality I was looking for, with the services I needed, I wouldn’t have called. If all things are equal, price is the one factor that will help us make our decision most of the time. Am I right? But the fact that the salesperson made getting this information a headache turned me off, and I walked away.

In Sheridan’s presentation, he quizzed several members of the audience on whether or not they listed pricing on their sites. One man in software development, when asked why he didn’t list pricing, said:

“Because it depends.”

And that’s the case for a lot of us. It depends on what the client wants; how big he is; how many he wants. But Sheridan shot that down and said that’s the case for everyone in the room, and it simply isn’t an excuse.

I get it now. I just listed prices (at least, starting prices) on my site as a result of this lesson learned. My goal is to at least weed out the people who can’t afford what my company offers, and to create a starting point for the pricing conversation. We’ll see if it draws more clients or makes it easier for potential clients to make a decision.

I have a challenge for you:

If you don’t list prices on your site currently, change that. Even if “it depends,” list prices “starting at” and see what happens. Direct potential clients to your site so they can understand what to expect with regards to costs. Let’s get out of the habit of pushing customers away by closely guarding pricing as a big secret! Are you with me?

Susan Payton is the Communications Manager for the Small Business Trends Awards programs. She is the President of Egg Marketing & Communications, an Internet marketing firm specializing in content marketing, social media management and press releases. She is also the Founder of How to Create a Press Release, a free resource for business owners who want to generate their own PR.

75 Reactions

This post reflects the conversations we’ve been having here. The upshot is that we’ve just decided to add prices onto our sites. We did it on one a few months ago and the response has been terrific, so we’re adding it to our main site now too (we have different brands with different sites). Thanks for confirming that we’re doing the right thing.

Transparency in pricing does hurt your margins IMO, but it’s not going to be an option in the coming years. With the amount of data reaching consumers, you’re either going to give them the knowledge up front, or they’ll get it from somebody else.

@Keith: (comment below). It seems to me that you are correct with regard to growing transparency on price. Its automated via various sites that scan prices….and all sorts of price info is available on the web. So it is a growing phenomena.

Glad you brought this issue up. It is a huge concern when someone in business is afraid to show consumers their pricing. What it shows me when I run into the “Let me tell you why you should buy this” pitch, is there are no set pricing which means I might pay more or less than the next person. Since the economy is becoming more social driven this method of pricing will backfire on businesses reluctant to market opening their product or services pricing. Things have changed and businesses have got to get with it by showing how much they are worth or be clicked passed to those businesses who see the value of listing their price.

Loved this article, thank you for posting this! I recently updated my own professional website (service business) and I made a very conscious decision to put prices out there for many of the same reasons you talk about here. In fact I have a “calculator” feature that enables potential clients to select their own price point based on certain determining criteria. My thinking was “How can any of my potential clients make an informed decision about this if they don’t know how to budget for it?” More service business and my own colleagues in my industry would do themselves a favor to adapt this as common practice, rather than the exception to the rule.

Susan!! Loved, loved this! No, not because you were kind enough to mention me, but the fact that you’re taking action to address the needs of your customers– that you’re turning the tide on a practice that turns off thousands of ‘could-be’ clients every day due to a lack of quality information and content.

As I said in LA, discussing pricing doesn’t mean we give every nut and bolt. But it does mean we give ranges. We help people get a feel for things. We help there know if there is a snowball’s chance or not. And by so doing, we have more quality in our lead base, a happier sales staff, and better margins in general.

Starting at… is a good meeting point. Customers do need to know if they are within purchasing range of the product so they don’t waste their and your time. The other side of the coin is that you are not forcing them to assign a value to a product without enough information to make an informed decision. Similar to calling Macy’s and asking how much a men’s white shirt cost. The answer is impossible to give without exchanging more information between the salesman and client.

Love it. I came seeing a tweet Marcus sent about this post I also remember that post of his. It was published about the same time I started publicly offering services on my blog and putting prices is what is getting a lot of people to do that initial contact. I asked a few people why didn’t they contact me before and they said they thought they could not afford it. Once I put the (affordable) prices up, it was a game changer.

I just picked up another useful tip here, wit “it depends” because Everyone’s needs are different and “starting at” tip is just what I needed. Thanks.

I’m torn about that gym conversation. Sure, you’ve done your research so you know that £30 gets you a nice, air-conditioned space with well maintained equipment – but what about the person who hasn’t? They’re just looking at £30 next to £20, never thinking that the £20 gym has one exercise bike, that’s got no wheel.

@Ash–
Good for you! I just did and let me say: the first lead that called me already knew what I charged and mentioned it. I was so glad I did it!

@Scott-
You’re right; I think we need to be up front about our pricing to be true to our customers.

@Andy–
Absolutely, but in this instance, I knew what to expect at each location. Had they all be the same price, I would have looked for differentiators, like air conditioning (erm, over here, ALL gyms have it; hope you were kidding) or a pool and decided from there. In some situations, like this one, price is the starting point.

Great little article. It brought an angle of my own on this to mind which I’ve blogged in response here. I think the barriers are a general thing. Businesses shouldn’t build barriers of any form between themselves and business!

Just yesterday I met with a financial adviser. These guys are the kings of not telling you about pricing since their “fees” are basically commissions on the investment products they recommend. I had a very candid discussion with him about how he was getting paid and I appreciated that he told me. I understand that he’s got to get paid for what he does and I just need to know how much he’s getting. It helps me understand the level of service I’ll get (if he doesn’t get much he won’t be very motivated to help me) and whether or not I’m a good fit for his business. The honesty improved my opinion of him (which could help him a lot since choosing an investment adviser is based heavily on the relationship).

Thank you for this post. It has inspired me to include my consulting fees to my website. While they may seem high to most, my clients have found that they receive excellent value for what they’re paying. I believe that full disclosure helps potential clients make an informed decision while filtering out those that are hesitant. Value is key in today’s tough economic times and anything we can do to make it easier for the customers to see it is helpful.

I’m curious, when you asked for the price of the gym, would it have been acceptable for the salesperson to say “The price is $123 but make me a trade and book a time to come down, meet me, and see what makes us worth $123″?

On a side note, it annoys me to no end when companies offer you incentives to remain a customer. The cell phone industry is brutal for this where you threaten to cancel a contract and they throw all sorts of free phones, accessories, and deals at you. Why wouldn’t you offer these things to happy customers?

Totally agree with you Susan. I have had prices on my website for ages and also wrote a post about the subject. What some do not understand is that our potential customers may be looking to buy when we are asleep. This occurs often on my site and if the prices and ability to buy service packages were not there sales would be lost.

I know that whenever I don’t see prices, I assume they will be WAY out of my budget so never inquire.I may have been pleasantly surprised but I doubt it. Some kind of pricing indicates transparency and that has to be better.

I believe many companies don’t state a price because they like to find out how much YOU as a client has to spend and then they can charge what they think you will pay! Not good.

We don’t put pricing on our web site but I often wonder if we aren’t making a mistake. Our problem is that we don’t like to be associated with a certain price since we are a VAR (value added reseller)for many of our products. If a company wants to buy 5,000 pumps from us and wants no warranty and no returns the price will be lower than someone buying 10 pumps from us and like the 3yr limited warranty we provide. What price to we advertise? Many of our competitors just buy pumps along with everything else they dump into the market and offer no value other than price. OK if you are an expert buyer but it will kill us with our smaller customers that need service. So for now we don’t put our prices up on our regular site.

I don’t put my prices on my website for a variety of reasons. One is that I can taylor MOST of my services into a package customized for that specific client. I also don’t because it allows me and the client to openly talk about services (“what is in it for me” factor) versus what is it going to COST me.

I work in the payroll service market and am happy that our company has always posted our price schedule online. Your story about the Health Club is the perfect example of why holding back price information can turn off a client.

Whenever I am looking to make a B2B purchasing decision I prefer to have at least a ball park idea of the costs. People are busy, if I like a product/service and it’s in my ball park I’ll buy it. However if a company makes it difficult for me to gauge my ball park I get turned off and will seek out options that make my search as simple as possible.

I don’t get businesses that don’t put prices on their web site. Your web site is your sales person. You provide all the right pieces of information and your customer can make a trusted and informed decision on the spot. I would recommend you study big and small ecommerce sites. See what you like and dislike about them. See what questions you have that are answered and not answered. These are same concerns your customers have. If you can anticipate and resolve concerns (much like a good restaurant server), I guarantee you will achieve more sales.

One of the keys to social interaction now is permission, and not giving your prices, or at least a range, is basically you asking to “sell” a customer before you have their permission to do so. As noted, it is a fatal mistake for many potential transactions. A better approach is to get the price out there and then ask “Can I tell you what that includes?”. They will always want to know, and now you have engaged your customer instead of irritating them.

Nice post Susan… chronically, I have been in the “it depends” camp. You are right, listing prices will (a) weed out unqualified potentials so no more wasted time for them or me and (2) gives us a starting point for the pricing discussion. So, no more excuses! I have decided to change that & my site this weekend.

This is a tricky topic, indeed. As a consumer, I DO want to be able to quickly get pricing information from vendors – like you did with the gym. And it’s a turnoff when I have to jump through hoops to do it.

However, as a B2B Service Provider, I had pricing listed on my website for awhile, then removed them after I realized that, “It DOES depend!” And it’s hard to tell someone that it’s actually going to be MORE than the price they got comfortable with on the site.

Oddly enough, after I removed pricing, I had a dream that a prospect called me, furious, saying “How dare you make me call you to get pricing!”

While I do prefer to try to “sell the value,” to prospects, I also realize the appeal of convenience and transparency in pricing. The “Packages Starting At…” idea might be worth considering in the future, but for now, my site does not list pricing.

I hate talking pricing, because “it depends” is the only truly honest answer until I get more information. So I am ready with a “typical” price range, with an outline of roughly what that covers. At least it helps qualify leads; many people right away come back with one of those I-was-hoping-you-would-work-for-slave-wages responses, and I know not to waste any more time on them.

Maybe it is my industry then…I have not had someone not inquire about my services because I don’t list my prices. I list my packages without the prices only because my packages can be customized to fit clients and after we talk, I send them my package price specifically for them…

I guess if you charge $500 for this or that and there is no customizing of packages, I could see how it would be helpful but would you still go for lowest price or the one that matches the values you have? Just sayin…

Thanks for writing this Susan. Reading this couldn’t have come at a better time. I used to have pricing on my website and I remove it because my pricing was too low. After hearing from several bloggers (who I respect and trust), I removed all pricing. I am now in the process of clarifying my services and offering them in an easier to understand format along with prices. I agree with @Brankica that using “it depends” and “starting at” will give me the added flexibility in pricing that I need to accommodate the varying needs of my clientele.

In my marketing consulting days, I ran across this as well. After numerous experiences similar to Susan’s, I had made up my mind to list prices. I knew it was contrary to my peers and most business model recommendations. I embraced that aspect and included an asterisk for a disclaimer. The disclaimer simply read; “Prices listed are subject to change at anytime for any reason, but most notably, scope of project. I want you to understand my expectations even as we discuss your expectations for your marketing results.”

Most businesses in my industry don’t list prices on their web sites. I think there are four main reasons:

1. We’re partially regulated, and any price we quote must be valid for a certain minimum period.

2. There are two or three major franchise operations known for their low prices — and known among the rest of us for their poor results. Anyone looking just at price would run to them first, and still end up paying us later to fix the product, but our code of ethics doesn’t allow us to point that out (nor — in my case, anyway — does my personal code of ethics).

3. Our inventory of services in some cases can rival the size of a major retailer, but very few of us are big enough to design an online catalog of that size (or to be able to afford to pay someone else to do it). In fact, the vast majority are firms with fewer than five employees.

4. “It depends” definitely applies, and it can make an extreme difference, with too many variables to accommodate on a web page.

Are these good reasons? Maybe, maybe not. I’m just pointing out what I perceive to be the main line of reasoning in one particular service industry.

I tried listing prices when I first started out, but I found that people think that no matter what price they pay, they will get the exact same results. And there is ALWAYS someone that will do it cheaper. If you offered to do the job free they would find someone that would pay for the privilege of doing the job. I think that customers that price shop only are often a waste of time and often more of a headache to work with. True putting the price out there weeds out those shoppers that will waste your time but sometimes they are oblivious to the fact that you get what you pay for. If a customer asks how much it is tell them you are not the cheapest in town but not the most expensive either. And if the pricing”depends” and they ask his much tell them ” as much money as we can get” you are being honest and you might even say it as a joke even though it’s really not. In reality that is always how much it costs for every business because you are on business to make MONEY. the customer knows that already. Let them know you are in business to make money and you want to solve their problem at a price they can afford. There is no need for duplicity, but I don’t feel that allowing customers to add up what you do against another company apples to apples is the way to do it if you sell super awesome apples and the other guys apples have worms. They first need to see the value. I don’t believe in selling a price I believe in selling myself as the solution. Unless you sell the exact same widget that everyone else sells….then it really is only price… Someone else will always BEAT YOUR PRICE!! Look at gas stations they have their prices up for the world to see. They have such a small margin of profit they have to stay within pennies of their competitions prices. 5 cents higher and the customer will cruise on down the road to somebody cheaper.

You nailed it! If you publish a “starts at” price, the web shopper will use that as a reference point. They will simply keep shopping until they find someone cheaper, creating a NEW reference point, until they can’t find a lower price. Quality and value don’t matter when the cheap competitor will promise the moon to get the order!

I typically look at price, features and function. Then I do a search on the company name and see what others have said about the company. There are also customer testimonials that are on the web site. Sure, any of the information my be planted, but so far I have had pretty good luck. On my site I use customer testimonials. I also explain a couple of products “you may have found” on another web site and why they are not a good value. Seems to help seal the deal.

It actually worked really well. When I would finally meet with the client, either face2face or via phone, we already had rough ideas of each others expectations and whether we could fill them or not. All that was left to do was discuss details. Of course, as a consultant, I was ‘selling’ a service. I personally feel though, that a service business ‘sold’ properly has just as much ‘physicality’ as a brick and mortar ‘retail’ business.

It is a great article. I work in the travel business in Costa Rica and I used to have prices on our website, but then I thought that, if almost nobody in the area had prices on their websites, it was because it was not a good idea to do that. I will start putting prices on our website again. Our prices are competitive, I should no be concerned about potential customers comparing prices with my competitors. Thank you Ms. Payton

Saw this article and got a kick out of it. We have a variety of businesses. In most we don’t list prices. On some we are a “higher priced” provider…with value…I assure you!! On others we have a variety of services.

I read the initial scenario with interest and humor. We certainly get calls like the one to the gym, wherein the response ends up like that one!!!! UGH. Often a failure on our part to handle it well. Sometimes, the customer is probably a price shopper and doesn’t care about anything else.

Sadly we have had calls like that. I’ve answered the phones and had the phone slammed down on me for those scenarios…and I’m pretty good.

Then I looked at a different scenario for one of the businesses: We have responded to questions on price with straight price answers and basically ignored the value element. Okay there is a scent of value in the response…but not strong enough.

Looked at about 50 recent queries and our sales effort on these was a conversion ratio at 10% of our Normal Conversion Ratio.

Hi Dave, I am not sure it’s an apples to apples comparison on conversion rates.

Have you factored into the mix the number of people who never contact you because they are frustrated that they don’t see prices? Or they just assume they can’t afford your service? If you factor them in, your conversion rate might be much smaller.

In other words, 100 people see your business. 60 are annoyed they see no prices and never contact you. Are you measuring your conversion rate against 40 or against 100?

@Dave–
Imagine what your conversion rate would be with price! It’s not “price alone.” But like I said, I knew the gyms all had the same types of services, so I started with price. This gym’s price was competitive, but you know what? I was turned off by the sales pitch. So they lost.

@Susan/ @Anita I’m not disagreeing with you. I doubt anyone has the 100% answer nor does every situation fit into one box.

We have a couple of different types of businesses and some of them are in varied markets. We have tried many things.

In one industry we know a price war erupted about 15 years ago. Base prices on the service are about 40% lower than they were then. Prices never recovered. Meanwhile the businesses are not doing measurably more volume. In fact because overall income dropped services for the customers dropped, whether the customers realize it or not…the businesses don’t provide what they could and did because they can’t afford it. We know it as do the operators in that market.

We have run prices in some businesses even as we were “high priced providers” versus others. We have experimented.

To respond to one of Anita’s points…we have increased contacts/leads from some businesses with better websites, different approaches, different content and emphasis…even as the price has not been on the website.

Unless we put prices on those businesses with those services we won’t be able to answer that question Anita. BTW: We measure like hawks ….sort of every which way.

Now as to conversions….with or without pricing on the site. Here is the one thing we have learned with these particular businesses over a long time while having prices/not having prices. etc.

Each of the businesses are local and they are service types. They typically require interaction and communication off web. Its often been a spin off of what Greg Sterling has often cited ( http://screenwerk.com ) after all his review of research on local web businesses…..people research online and buy in person!!

That isn’t 100% of course…buying online direct is always growing. Groupon and LivingSocial are prime examples of that phenomena.

In any case back to conversions: With prices and without prices on the sites. Here is the thing that most impacts the ultimate conversion rates. Our ultimate conversions are sales not leads or contacts. Leads and contacts are web conversion rates. They are not the bottom line for these services which predominately require personal interaction (say over 90-95% of the time)

Very cool discussion going on here! @Dave (both) the nail on the head response is, “no stock answer”. I am a marketer, and I consider myself a pretty good one. As marketers go, we know one truth to be self evident; Test. Test. Test. Human interaction has been followed by many professions for millenia, and will continue to be so. But, now as a ‘person’, i want to be the guy that put my cards out there. I can’t take responsibility for the customer. Hopefully, they will appreciate my value proposition as much as my price. I won’t charge less than I feel comfortable with, and i wouldn’t expect them to pay more than they feel comfortable with. In my ‘farmers markets’ negotiations, I am completely comfortable to be the first guy ‘in’… “this is what I’m offering, what are you asking”.

Great article! I have my pricing as well as my services because I believe my clients should be well informed by not only what services I can provide, but how much those services are going to cost. I am more apt to do business with someone who has their pricing listed as opposed to someone I have to call and listen to their “pitch”.

I have been thinking about this for a while as in my sector nobody shows their prices. Sure it depends whether it is B2B or B2C, and there are some difficulties if you want to try and yield according to demand.

Funny thing. I just removed all pricing from my website. I did so because I – like everyone – custom design my services. I like the “from” angle. Maybe we should be offering a “sample” service with a price. Good topic. and current in my case.

Small business owners are often scared of pricing, not just online, but in conversation with customers who are trying to buy from them! Whether the pricing discussion is on a website or in person, you need to have confidence in the value you provide and the price you charge for that. Otherwise, customers will sense your fear and negotiate deeper discounts (they may even walk away in favor of someone with more confidence) and you’ll waste a lot of time talking with people who are not legitimate prospects.

If its price that you are competing with then you should look at other factors.

Another point is “Testing” if we are wanting to be a dominating concern then testing is the way you will accomplish your goals. I would be at least A/B testing my website to see if prices shown or not shown makes any difference to conversions.

The big problem with not putting prices on your site is that it causes clients/customers to walk away AFTER you’ve already spent time and money to win them. If my price is way out of client’s budget, I want them to walk away as soon as possible in the sales process.

Susan,
I normally do not leave comments for online blogs or articles but I did happen to read this article and i had to reply. I am launching a brand new service and I am going to try your theory. if i just put something like Prices Start at (whatever) and then put *prices may vary right after it. I don’t see anything wrong with them knowing our bottom price. Maybe this will get me out of the habit of stealing the deal and me making no money LOL

Very interesting subject. I’ve always refrained from putting pricing on my site simply because every client is different and there are no set fees, it all depends on the clients requirements. I think I will put this to the test and add some “Starting from” price information. People want what we do for peanuts it seems and we waste valuable time putting together quotes/proposals. With starting from prices at least we can start to weed out undesirable clients without doing anything.

Willie–
That’s exactly the point. For example, I offer content marketing services. There are people out there that think this should cost $5. But it doesn’t, at least not with me. By listing your prices, you weed out those “undesirables,” as you put it!

Hiding prices so that you can ask prying questions then work your sales magic is annoying.

Many of you are afraid to list your price because deep down you know your markup does not provide a proportional value beyond your lower priced competitor.

It is like the constant bleats from mom and pop businesses that oppose Walmart’s expansion because they think customers need their ‘special advice’ to buy a jar of yellow mustard or a three pack of white socks.

Stop flattering yourselves, your ‘value add’ is often as empty as the ‘extra bonus’ items on a late night infomercial.

Most customers are aware of and willing to pay for real quality differences. They go to McDonald’s for a cheap lunch on Tuesday and then to Chez Ritz for an expensive dinner on the weekend.

While there are some customers who want champagne at beer prices, they will learn after failing to achieve such savings.

So too will some customers who buy brand X and get disappointed.
But guess what, they can find Brand A sold at many locations and with posted prices.

Even luxury items have gone mass market because the dirty secret is much of that is easily mass produced even the quality items.

Amazon is the truth bringer and has shone a light on the murky sellers, Mr. Shady McUpsell and Suzie ValueFairytale.

I understand. I’m not a web developer, but I don’t list prices because it really does depend on what the potential client wants. However, as Susan mentioned, I will be considering listing starting prices. Maybe it’s something you can do too.

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